How Long Does Bad Credit Stay on Your Credit Report in Canada?

I. Introduction

A credit report is a snapshot of your financial history. Depending on the credit bureau, it generally includes:

  • Identifying information, such as your name, current and previous addresses, Social Insurance Number, phone number, date of birth and current and previous employers.
  • Credit history, which is a history of your payments to credit grantors (banks, credit cards, retail stores etc.)
  • Public records such as bankruptcies, consumer proposals or judgements
  • Inquiries of credit grantors that you or the law have authorized to receive your credit information.

The credit report is one of the main tools for credit grantors, such as banks or credit card companies, to decide whether to grant you credit.

Importance of maintaining good credit

There are several advantages to keeping a good credit score. As mentioned above, credit grantors will consult your credit report to see if your name is in good standing. So, a good credit score will make it more likely to get the following benefits:

Bigger Chance to Get Approved for Credit Cards or Loans and Lines of Credit

As credit grantors will weigh the risk and benefits of granting you credit, a higher credit score will increase your chances of being approved for new credit.

Lower Interest Rates on Loans and Credit Cards

Not only will a higher credit card increase your chances of being approved for a loan or credit card, but it may also help you qualify for lower interest rates and finance charges when you apply. 

Higher Negotiating Power

A high credit score gives you more leverage to negotiate a better interest rate if you have existing debt, such as a credit card. Or if you are applying for a new loan or mortgage, it also gives you more negotiating power to lower the interest rate.

Better Chance for Higher Borrowing Limits

Your credit score also influences how much you can borrow on a loan or how high of a limit your credit card will have. A good credit score shows that you can pay off debt on time, increasing credit grantors’ faith.

Easier Approval by Landlords

Many landlords also use credit scores to screen potential tenants. They will especially look out for any unpaid rental balances or evictions, which could significantly limit your chances of signing a lease.

Lower Car Insurance Premiums

Similarly, car insurance companies utilize credit reports to gauge applicants’ credit ratings. A higher credit score can lead to lower premiums.

Reduce the Chance of Security Deposits

Many companies, utility companies, or cellphone providers will check your credit rating before agreeing to a contract. If your credit score is bad, they will likely ask for security deposits to protect their services.

How are credit scores calculated?

Credit bureaus have different algorithms to calculate your credit score, so you may see different scores depending on who you check with. Their information is the same; however, they might weigh different factors more heavily. The main factors that play into calculating your credit score are

Your payment history

Your payment history contains information about any payments against any credit issued. This includes credit cards, bank loans, mortgages, retail department store accounts, car loans, home equity loans and more. It will show if you have repaid the credit on time or have late or missed payments, including how much, how often and how recent. 

Your used credit vs. your available credit

This factor checks all available credit of credit cards or other revolving lines of credit against the actual amount you owe at the time. 

The length of your credit history

This typically indicates for how long your oldest and most recent accounts have been open, as well as the average age of all of your accounts. This allows creditors to see how you have handled credit accounts over long periods.

Public records

If you have a bankruptcy or consumer proposal on your file or issues with collections or other public records, they will be considered risk factors.

The number of inquiries into your credit file

While any inquiry into your credit file will be recorded, some can negatively impact your credit score, the so-called “hard inquiries.” These are inquiries from credit grantors for new credit, such as a new credit card or loan. While on their own, they will not affect your score, if their frequency increases within a short amount of time, it can be a sign of potential financial difficulty and can lead to a decline in your credit score.

II. What is Bad Credit?

Definition of bad credit

Several factors influence if someone is considered to have bad credit. Generally, if you have a history of not paying your bills on time or a bad income-to-debt ratio, you have bad credit. This often is reflected in a low credit score as well. Generally, on a scale from 300-850, any score below 580 is considered bad credit.

Factors that contribute to bad credit

The main factors that contribute to bad credit are:

  • Payment history. If you fail to pay your bills on time, your credit score might take any missed or late payments into account, as well as how long they went unpaid and how often this happened.
  • Amount owed. The total amount owed to all creditors, including how much is owed on certain accounts and how much of your available credit has been used.
  • Types of credit. The more different and how many accounts you have, such as credit cards, retail accounts, mortgage loans, or installment loans, can influence your credit score.
  • New loans. Applying for different loans or credit cards within a short time can negatively affect your score, as it could be viewed as a sign of financial difficulties.
  • Length of credit history. The ages of your oldest and newest credit account and the average age of all your accounts can play a role when calculating your credit score.

Also Read: How To Fix the Bad Credit Report

III. How Long Does Bad Credit Stay on Your Credit Report?

Different types of negative credit information will remain on your credit history for different lengths of time.

  • Late payments will remain on a credit report for up to 6 years from the date they were reported. Please note that even if late payments are eventually paid, they will remain on the credit report.
  • If a creditor charges off your account to a collection agency, the entire collection account will remain on your report for 6 years from the last payment date. If the balance is paid before the end of the 6 years, the account will remain on your credit report, but it might have less of an impact on your credit score.
  • Bankruptcy will remain on your credit record for 6 years (or 7 years, depending on the credit bureau) after the discharge date or 7 years after the date filed without a discharge date. In the case of a second bankruptcy, both bankruptcies will show on your credit report for 14 years from the discharge dates, even if the first may already have been dropped.
  • Judgments, debts owed due to court action, will remain on your credit record for 6 years (or 7 years, depending on the credit bureau).
  • A consumer proposal is a legal agreement between you and your creditors allowing you to pay off an agreed-upon percentage of your debt within a maximum of five years. It will be removed from your credit report 3 years after you’ve paid off all the debts agreed on in the proposal or 6 years from the date it was filed, whichever comes first. 
  • Secured debts, such as mortgages, auto loans or secured credit cards, will remain on your credit report for 6 years from the date filed.
  • Banking items, such as cheques returned for insufficient funds, are dropped from your credit report after 6 years from the date reported.

IV. How Does Bad Credit Affect You?

Bad credit can affect you in many ways and is more wide-reaching than you might think. Poor credit history can lead to being declined in applications for credit cards or loans or, if you are approved, it might be with fewer options or higher interest rates. Another potential negative consequence of bad credit is it can make it more difficult to find housing or acquire certain services such as utilities. Depending on the company, it could even be held against you when trying to find employment.

Also Read: What Happens If I Don’t File My Taxes in Canada?

V. How Can You Improve Your Credit Score?

There are different ways you can work to improve your credit rating.

Ensure to Make Payments on Time

As your payment history is the most important factor affecting your credit score, it also has the greatest potential to help you improve.


  • always make your payments on time
  • make at least the minimum payment if you can’t pay the full amount that you owe
  • contact the lender right away if you think you’ll have trouble paying a bill
  • don’t skip a payment even if a bill is in dispute


Some financial institutions offer electronic notifications by email or text message to alert you of invoices or missed payments, which can serve as an excellent reminder to keep up with payments.

Use Credit Wisely

Other than obviously not exceeding your limit, it is generally recommended to keep your credit utilization to 35% or less of your total available credit. Some lenders can view high credit utilization as a potential risk even if you make your timely payments. 


To calculate your credit usage and total available credit, you must include all credit cards, lines of credit and loans.

Try to Increase the Length of Your Credit History

Long-standing credit accounts are better for your credit score than new accounts. It is important to note that, for example, transferring your credit card balance to a lower-balance product will be considered new credit. 


Therefore, keeping an older account active is a good idea even if you don’t necessarily need it.

Limit the Number of Credit Checks/Inquiries

As so-called “hard inquiries,” which are inquiries from lenders for new credit, can negatively affect your credit score, it is crucial to control the number of credit checks. Many credit inquiries in a short time may indicate that you are in financial trouble. Therefore, limit the number of times you apply for credit and only apply when you really need it. If you need to shop around for a loan for a car or a mortgage, try to get your quotes within two weeks, as these inquiries will be combined and treated as a single inquiry for your credit score.

Use Different Types of Credit

Another way of helping your credit score is to have a mix of different types of credit, such as a credit card, a car loan and a line of credit. This will be seen as more positive than having a lot of credits of the same kind. That being said, ensuring you can repay whichever you borrow is vital.

VI. Conclusion

Depending on the kind of bad credit you have, it can remain on your credit report for anywhere between 3 and 7 years, in some cases even 14 years. It is crucial to take all possible steps to improve your credit and keep it in good standing.

Many Canadians struggle to keep their finances in good standing, and you need to seek professional advice when you notice that you are having increased problems managing your finances and see debt starting to pile up. A professional can analyse your financial situation and advise you about all available options for debt recovery. They have the experience and expertise to find the best solution for you.

Risman Zysman has over 45 years of experience providing quality debt solutions. Our team of professionals understands the fears and frustrations of individuals facing financial difficulty. At Risman Zysman, we present each client with a full range of options and guide them to make the right choices so they can move forward.

To find out how we can help you, call us at 416-222-4600 and get a free, confidential, no-obligation consultation today! Risman Zysman can help you on the road to financial recovery.

Similar: What are the Risks to Debt Relief Options in Ontario?

Frequently Asked Questions

What is bad credit, and how does it affect my credit report in Canada?

Bad credit comes from not making payments on time or missing them altogether, having too high credit utilization, having opted for bankruptcy, or a consumer proposal to pay off part of your debt. It can negatively affect your ability to be approved for a new credit card or loan, lead to higher interest rates and even affect applications for utilities or cell phones. In some situations, it can even lead to problems when looking for employment.

How long does bad credit stay on my credit report in Canada?

It depends on the type of bad credit how long it will stay on your credit report. For example, missed payments will remain on your report for 6 years, a bankruptcy for 7 years or a consumer proposal for 3 to 6 years.

What types of negative credit information can appear on my credit report?

Types of negative credit information to appear on your credit report includes your payment history, including late and missed payments, accounts charged off to collection agencies, bankruptcy, consumer proposals, judgments or secured debts.

Can I remove bad credit from my credit report in Canada?

Unless it was an error, bad credit would remain on your credit report for a certain length of time, depending on the type of negative credit information. You can prevent this from happening by ensuring you make all payments on time, but you cannot remove it after the fact.

How does bankruptcy affect my credit report in Canada?

Bankruptcy will remain on your credit report for 7 years from discharge in Ontario and will significantly impact your credit score.

Will bad credit affect my ability to get a loan or credit in Canada?

Bad credit may affect your ability to get approved for a new credit card or loan. Depending on how bad it is, you might be declined or only be approved at high interest rates.

Can I still get a credit card with bad credit in Canada?

It is possible to get a credit card with bad credit. It is called a secured credit card, where you have to put down a deposit when opening the account, and the spending limit is the deposit amount. The credit card company holds the deposit as collateral if you cannot repay the debt.

What steps can I take to improve my credit score in Canada?

The most critical step is to ensure to make your payments on time. This accounts for the biggest impact on your credit score. Also, make sure to keep your credit utilization to 35% or less of your total available credit. You should also try to limit new credit inquiries and checks.

How often should I check my credit report in Canada?

It is generally recommended to check your credit report at the very minimum once a year. Also, it’s a good idea to check it before applying for a new credit, whether it is a credit card, a home or auto loan, or something else.

Does bad credit impact my ability to rent an apartment or get a job in Canada?

Bad credit can negatively impact your ability to rent an apartment, house, or find employment. Many landlords will check your credit report for any previous history of missed rent payments or evictions.